Retail brightens dull market in Viet Nam
29-01-2013
Marc Townsend, managing director of CBRE Vietnam, said retail spaces are thriving especially in District 1 in Ho Chi Minh City and Hoan Kiem district in Hanoi.
In addition to that, other fast-growing residential areas in suburban districts like Districts 2 and 7 in Ho Chi Minh City and Tu Liem district in Hanoi are also experiencing strong demand for quality retail space.
“Retail property is considered to have some of the strongest fundamentals among the various real estate sub-sectors, thanks to the huge needs for shopping from the local people as well as from increasing number of foreign tourists,” Townsend said.
“Key to investor sentiment is that the number of high quality shopping centres is still limited, dodging the oversupply situation in other sectors,” he added.
Recently, with the increase demand and consumption from the domestic market, many international brand names are looking for opportunities in Vietnam.
In addition to some big names already here like Parkson, Metro Cash & Carry and Lotte Mart, some others have confirmed or have shown strong interest to enter the market like Aeon, Takashimaya and Tokyu (Japan), Tesco (England), Wal-mart (the US), Carrefour (France) or FairPrice (Singapore).
E-mart, the biggest retail group in South Korea, last week announced that it was preparing for the opening of first branch in Vietnam within this year and expand to 17 supermarkets before 2017.
According to Ja Young Heo, marketing director of E-mart, Vietnam was the ideal destination for South Korean investors, which include retail logistics and household appliances.
The retail sector in 2012 proved stronger than many of the other segments in real estate, focusing much on food and beverage (F&B), entertainment and essential goods sector.
Le Kim Hoa, retail head from Cushman & Wakefield Vietnam, said F&B always attracted customers.
“It’s good to have F&B, because it enriches the activities in a shopping mall, better facilities, and increases foot traffic to shopping centre generally and also to other categories shops,” Hoa said.
In 2012, retail space grew in Ho Chi Minh City with a range of new developments put into operation such as Vincom Eden, Pandora city, and the re-launch of Bitexco Financial Centre while in Hanoi, IPH and Me Linh Plaza Ha Dong opened its doors.
Ho Chi Minh City anticipates an additional 200,000sqm retail space by 2015 including Saigon Center Phase 2, SC Vivo City, Cantavil Premier, Thao Dien Pearl, Airport Plaza and Aeon Celadon City.
At the same time in Hanoi, retail venues will grow with the opening of two Vincom projects, Lotte Centre, Trang Tien Plaza and Ciputra Hanoi Mall.
International brands such as Dunkin Donuts and McDonalds are seeking opportunities to enter this market, according to Cushman and Wakefield Vietnam.
“The Vietnamese economy remains fragile as we move into the first days of the new year. However there is no need to show fear and anxiety,” Townsend said.
He pointed out that Ho Chi Minh City just welcomed the new luxury shopping centre of Vincom Center A and the centre has quickly become a preferred weekend venue for the city’s young shoppers.
“Hanoi will follow suit later in the year with the most modern shopping centre yet, also by Vincom,” Townsend added, referring to the Vincom Mega Mall Royal City. “Yes, there are some markets down, but there are also some markets up. So more than ever before, it’s pricing, pricing, pricing that will make the difference,” he said.
